Ten Square Games reported 499.9 million Polish zlote ($116 million) in revenue in 2022, compared to 134.9 million zlote ($146.3 million) in 2022, representing a decline of 23%.
The company’s latest financial statement examined a turbulent year for the company and the mobile gaming sector as a whole, with macroeconomic factors such as regulatory changes, and the normalisation of the market following the ‘Covid boom’ leading to companies throughout the sector reporting year-on-year declines.
The Poland-based company specifically highlights Russia’s invasion of neighbouring country Ukraine as having a major effect on the company’s financial performance in 2022, stating that “blocking the access of players from Russia and Belarus to games after Russia’s armed attack on Ukraine translated directly into the level of the Group’s revenues, and additionally also into the dynamics and competitiveness of the games, in particular in the flagship title Fishing Clash. The share of the Russian market in payments from games in 2021 amounted to approx. 5.3% – including approx. 6.5% for Fishing Clash and 2.5% for Hunting Clash.”
Notably, among the deductions listed in the report, Ten Square highlights a million zlote ($231.7 thousand) donation “to public benefit organisation - war in Ukraine” in Q1 2022.
Ten Square’s adjusted EBITDA stood at 128 million zlote ($29.6 million) for the year, representing a 40% from 224.4 million zlote ($52 million) in 2021.
A positive outlook
The company notes that while its financial results are low compared to 2021, it rebounded in the second half of the year, identifying “a dynamic recovery (Q3) and stabilisation (Q4).” While the company did post continuing declines in some metrics - for example the company’s profit on operating activity declined from 28.3 million zlote ($6.6 million) in Q1 to 5.6 million zlote ($1.3 million) in Q4 - there were noticeable rebounds throughout the year.
Adjusted EBITDA stood at 39.2 million zlote ($9.1 million) in Q1, falling to 26 million zlote ($6 million) in Q2. However, the company saw a rebound in Q3, reaching 30.5 million zlote ($7.1 million), before climbing to 32.1 million ($7.4 million) in Q4. While this still represents a decline from 2021, president of the management board Maciej Zuzalek notes that the pandemic represented an unprecedented period of growth.
“Last year’s results should not be compared with record numbers from the pandemic period, which were supported by unprecedented circumstances, including lockdowns. In order to fully assess how the Ten Square Games Group has changed, it is worth comparing it to the times before the outbreak of the pandemic, which significantly changed the dynamics of the market and influenced the pace of development of the Group.
“Compared to 2019, payments from the games of the Ten Square Games Group more than doubled, the adjusted EBITDA result was higher by over 60%, and we allocated the surplus of cash generated to investments in the Italian Rortos studio and the Krakow Gamesture studio. Thus, we have taken another step towards diversifying the portfolio of our titles. In addition, thanks to high cash flows from operating activities, we paid a dividend for both 2020 and 2021 in the amount of 10 zlote per share.”
We listed Ten Square as one of the top 50 mobile game makers of 2022.